Throughout its history, the Academy Awards has been subject to intense criticism for the issues it embraces — and ignores. This year’s uproar over the lack of diversity among nominations in the highest-profile awards categories is the latest example. This failure reflects a chronic dearth of opportunity at Hollywood’s top artistic and financial levels. The milestone nominations for best picture for “BlacKkKlansman” and “Black Panther” last year or the victory of “12 Years a Slave” in 2014 seem like aberrations.

That lack of diversity also means a missed financial opportunity due to Hollywood’s unwillingness to take reasonable risks. This is largely because the studios’ frequently white, male decision-makers and prominent public figures represent decades-old demographics and thinking. The audience for theatrical movies is now dramatically more diverse in the United States and internationally.

In the 2017 report on the Hollywood workforce, “New Skills at Work: Keeping Los Angeles at the Cutting Edge in an Evolving Industry,” the Milken Institute found that Hollywood decision-makers did not expand their networks and take chances on talented unknowns, most notably women and minorities. This gap doesn’t just affect hiring of directors and lead actors; it also touches on choices in subject matter and a broader acknowledgment that a different, more modern approach is likely to pay off.

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Despite Sony Screen Gems’ highly successful strategy targeting African American moviegoers with films like “Stomp the Yard” and “Think Like a Man” (each of which cost about $13 million to make and earned more than $75 million at the box office)
and the global popularity of “Black Panther” and the “Fast & Furious” films with their significantly minority casts and crews,
Hollywood too often worries that minority- and women-driven projects are more likely to fail. That thinking is ironic, since filmdom’s biggest flops have almost always had white male directors and stars.

The year 2019 should have been a banner one for women in many respects. Marvel Studios, The Walt Disney Co.’s highly successful subsidiary, finally gambled on a superhero movie that starred a woman and was co-directed by another — “Captain Marvel.” It was a massive box office success, one of only 46 films in history to earn more than $1 billion worldwide. “Hustlers,” a film by women about women’s empowerment, was one of the year’s most profitable films, grossing almost $160 million globally.

Women directed, produced and starred in several other critically acclaimed stories that were hugely profitable but failed to win Academy voters’ favor. The Greta Gerwig-written and -directed “Little Women,” which was produced by Denise Di Novi, Amy Pascal and Robin Swicord, deservedly garnered a best picture nomination, but voters neglected Gerwig in the director category. The women-helmed “Hustlers” (Lorene Scafaria), “Harriet” (Kasi Lemmons) and “The Farewell” (Lulu Wang) combined for a total of two nominations: best actress and song for “Harriet,” which tells the story of the abolitionist Harriet Tubman.

Even the good diversity news about the nominations bears a sour note. Although 31% of all nominations went to women, no woman received a director nomination. That’s nothing new. Only five women in Oscar history have been nominated in the category, and none more than once. In addition, Cynthia Erivo’s actress nomination for her portrayal of Tubman highlighted the absence of actors of color among the acting nominees. Academy voters chose not to recognize Awkwafina in “The Farewell,” even after the Asian American actor won a Golden Globe for her widely praised starring role.

The Oscars are Hollywood’s way of congratulating itself for work well done. And given the number of outstanding films this year, the industry has a lot to feel good about. Filmmakers tackled important, engaging subjects with skill and passion.

But the awards also reflect larger, less-favorable truths. The industry continues to deny people more representative of the changing world in which we live the opportunities they deserve. This error is hurting Hollywood where it counts most: its bottom line. In this light, taking a few chances on creative talent outside the traditional pipelines may not be such a big risk.

The Motion Picture Academy is not alone, in Hollywood or in the broader entertainment industry, in falling back on what it knows best. But if it wants to boost ratings for the Oscars, and resonate more with the public, it needs to be willing to take new risks — because the rewards will surely be worth it.

Kevin Klowden is executive director of the Milken Institute Center for Regional Economics and California Center.